Brazil's UNICA Reports Strong January 2026 Sugar Output, High Ethanol Diversion Continues

Sao Paulo, Brazil – UNICA, the Brazilian sugarcane industry association, has released its latest data for the first half of January 2026, indicating a robust start to the new crushing season in the Center-South region. Sugar production for the period reached an impressive 1.8 million metric tons, significantly higher than the same period last year, attributed to favorable weather conditions and an earlier start to operations for some mills. Despite the strong sugar output, the diversion of sugarcane towards ethanol production remains notably high. Approximately 52% of the processed cane was directed towards ethanol, underscoring the government's continued push for biofuels and the attractive prices offered for ethanol in the domestic market. This high ethanol allocation is a critical factor influencing global sugar supply, as it limits the amount of cane available for sugar manufacturing. Analysts are closely monitoring whether this trend will persist throughout the main harvest, as it could temper the overall increase in Brazil's sugar exports despite the larger cane crop. The strong start to the season has provided some relief to the global market, but the sustained preference for ethanol production suggests that Brazil's full sugar export potential might not be realized, thereby keeping a floor under international sugar prices. Mill efficiency and logistics are also being monitored closely as the season progresses.